California: How about a retroactive tax grab, plus interest?

posted at 12:01 pm on March 20, 2013 by Erika Johnsen

In his State of the State address in January, Gov. Jerry Brown proudly proclaimed that, “Two years ago, they were writing our obituary. Well it didn’t happen. California is back, its budget is balanced, and we are on the move.”

…Which is interesting, because the January unemployment numbers just came in, and California is apparently competing with Rhode Island for the worst state unemployment rate in the country.

California’s jobless rate was unchanged at 9.8% in January for the second straight month, and that lack of improvement put the Golden State in a tie with Rhode Island for the worst unemployment in the U.S.

On the other end of the spectrum, North Dakota had the lowest jobless rate, 3.3%, the government said Monday in releasing updated and revised employment data for all 50 states.

California will release its county-by-county breakdown of jobs Friday, which economists expect will reflect the slow growth that is predicted in the state for 2013.

While some of California’s interior counties are really struggling, the wealthy coasts and the tech industry are helping to keep everything propped up — but it seems that the progressive state just can’t resist taking a little off the top wherever possible.

California’s top-end taxpayers — already steamed over a recent hike in the nation’s highest state income tax — are now fuming over a new $120 million retroactive tax grab on small business owners.

In December, the state’s tax authority determined that a tax break claimed over the past few years by 2,500 entrepreneurs and stockholders of California-based small businesses is no longer valid and sent out notices of payment.

“How would you feel if you made a decision, which was made four years ago, (and) you absolutely knew was legally correct and four years later a governing body came in and said, ‘no, it’s not correct, now you owe us a bunch more money. And we’re going to charge you interest on money you didn’t even know you owed’,” Brian Overstreet told Fox News from his office north of San Francisco. …

“Once the revenue is identified, those folks up in Sacramento will figure out how to spend it already,” warns former state Sen. George Runner. “And that’s what makes this so difficult. Even though it has this great bipartisan support as being wrong.” …

But don’t you dare imply that California is engendering an unfriendly business climate! California certainly has plenty of lifelines, and officials will point to various positive economic and employment trends as evidence that California is heading in the right direction — but other states are stepping it up on revising tax codes, reducing regulation, and attracting businesses, and the California blue-state model is hardly a recipe for long-term success.

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“How would you feel if you made a decision, which was made four years ago, (and) you absolutely knew was legally correct and four years later a governing body came in and said, ‘no, it’s not correct, now you owe us a bunch more money. And we’re going to charge you interest on money you didn’t even know you owed’,” Brian Overstreet told Fox News from his office north of San Francisco. …

Hmm why do Charlie Brown, Lucy and a football come to mind over this.

Just remember, the leftist government makes the rules, which are always subject to flexibility and also be retroactive as needs evolve.

Cali, Cali, Cali, I do believe you have beaten Mass. in the arena of managing to find and elect the most psychologically stunted people in the nation. Seriously, is there ANYONE in that state government who has more than a 1st grade level of economic acumen?

I saw this yesterday on Fox’s Special Report and couldn’t believe it. Even for California, it seemed beyond the pale. How the hell is that even legal to retroactively tax business owners(plus interest)? And what exactly do they think this will do to existing business owners and any sane person mulling over whether to set up shop in that state? It’s not like the word of a California politician means anything anymore, so most of them will just opt to steer clear of that place altogether.

Maybe when the entire state collapses from overwhelming political greed and public stupidity, that is any time now, and the chaos of rioting in the streets, looting and pillaging evoke martial law and a federal takeover……and even that probably wont’ be enough.

All I can say is that border states better have a plan in place to seal themselves off from those attempting to flee the pending disaster.

But don’t you dare imply that California is engendering an unfriendly business climate!

Imply? This money grab is about as subtle as a brick to the face.

Couldn’t happen to a nicer group of parasites. They vote these people in election after election and are beginning to realize a fundamental truth. When you run a socialist state, at some point the state is going to run out of other peoples’ money and are going to come knocking at your door.

Sounds like eastern Europe after the wall came down. All those incentives to locate a factory there went “poof” once the construction was completed. Who wudda thunk it would happen in the civilized world.

Seriously, is there ANYONE in that state government who has more than a 1st grade level of economic acumen?

Bishop on March 20, 2013 at 12:09 PM

Assuming that most of these people are graduates of California public schools…..California was the “model” for public education back in the 50s and 60s. Nutty ideas like schools without walls came out of California.

Well, I would suggest that all those lab rats grew up and are now running the asylum.

Legality is a relative term in the CA Legislature. The increased income tax passed last November was also made retroactive to include 2012. When you can’t plan based on current law you’re at the mercy all-knowing economy killers. I hate this sh!thole.

Liberalism is their religion, and in that sense, they make Muslim jihadi’s look like reformationists. They will always be chasing that next tax dollar, that last nanny-state program until the day they die.

Cali, Cali, Cali, I do believe you have beaten Mass. in the arena of managing to find and elect the most psychologically stunted people in the nation. Seriously, is there ANYONE in that state government who has more than a 1st grade level of economic acumen?

What a gaggle of dopes.

Bishop on March 20, 2013 at 12:09 PM

In California the public employee unions dominate. (Hero Firemen, First Responders, Teachers, etc) .. They do a great job of getting the weak minded to vote for Democrats.

The Republicans are old and victimized by corrupt “consultants” who get 40% of the campaign expenditures.

Don’t laugh, this process is coming to your state as you read this. The public employee unions are organizing the weak minded as you read. The Republican “consultants” are reading the “news” to figure out what positions to have their candidates take.

Notice, that this story isn’t on the “NEWS” .. (You can shoot all the pigeons on the tree if you start at the bottom and work up. But if they see one fall, then they’ll be afraid and fly away. Voters seem to be as stupid.)

A few years after that, the California Franchise Tax Board sent me a notice announcing that I owed them a couple of hundred bucks from a prior year. (Oddly, the Federal government made no such claim – I had a very simple tax return, so it’s not as there was a big divergence between my Federal and California filing.)

I was busy, shrugged, and paid – it wasn’t worth pursuing, and I didn’t want to find out what happened if I ignored the notice.

I always wondered if the Franchise Tax Board did this to California emigrants on a routine basis – sort of an exit tax, as it were.

Well, I would suggest that all those lab rats grew up and are now running the asylum.

Oh, you bet they are. All over the nation. And all those communist financed hippie college protesters making noise in the ’60s? They also wised up and figured out the best way to effect the changes they demanded was actually finish up college with degree in hand and get legitimate and prestigious work in areas in which they could impact the changes in that they desired – politics, media, government, law, education and religious institutions. It seems to have worked. Many have been and still are in positions to reeducate and indoctrinate the generations that followed them.

If taxes could be assessed retroactively, then California could hit all of those that have left the state, which brings us to this idea that was raised a few months ago and pooh-poohed greatly by the talking heads as lunatic idea by the tinfoil hate crowd…

So, maybe, California isn’t to the point of exit taxes, but if they are discussing retroactive taxes, they could certainly attempt to tax those that were living or doing business in the state during whatever time period they set.

It’s only the beginning. More forms of make-it-up-as-we-go-along Cyprus-esque stratagems of confiscation are simply inevitable. These people are not only incapable of recognizing the failure of their governing model, but caught up in a profound psychological denial and projection which can ONLY lead to increased attacks on the producing class. You see, the state’s plight must be the fault of business — the actual “takers”, selfishly hoarding and investing their money rather than donating it to the noble and beneficent State.

CA folks whining need to take personal responsibility and move out of the Blue Paradise. I did. Moved out of MA to Live Free or Die (I checked, you get to pick which) NH. Easy for sane folks to get concealed carry permits in NH as well.

Look to kalifornia now as to where the USA will be in four years. I bet every single donkfacist is drooling over taking depositers money like proposed in Cyprus. Only it will sail through the legislature here.

On the other end of the spectrum, North Dakota had the lowest jobless rate, 3.3%, the government said Monday in releasing updated and revised employment data for all 50 states.

North Dakota represent!!

Unlike California, we aren’t scared sh1tless of oil and fracking. And we are a historically agriculture heavy state… hell, we’ve got nothing but farms here… so if fears of fracking causing harm to water supplies were justifiable, we’d be the first on the bandwagon to curtail fracking. instead, it’s been a massive boom that has house values rising, unemployment low, and wages skyrocketing all over the state.

Texas Legislature meets every other year. The Texas Constitution limits the regular session to 140 calendar days.
Only the Governor may call the Legislature into special sessions, unlike other states where the legislature may call itself into session.

I always wondered if the Franchise Tax Board did this to California emigrants on a routine basis – sort of an exit tax, as it were.

Realist on March 20, 2013 at 12:24 PM

That’s similar to my experience. When I was stationed in CA with the military I kept my residency in another state because there was no way in hell that I was going to pay CA taxes. Every year I would dutifully file my taxes with the feds and my home state. Every year I would get a letter from CA telling me that they thought I was a tax cheat since they didn’t get theirs along with Uncle Sugar. It clearly was trolling for tax dollars which they were far more efficient at doing than any of the other “services” they were operating.

Kalifornia is a case study in what happens when Marxist Democrats violate State and Federal Law to achieve one party rule. Kaifornian’s voted overwhelmingly to redistrict Kalifornia to bring about an end to the Marxist Democrat control of the State, both Kalifornia State Law and Federal Law stated unequivocally that neither political party could influence either directly or indirectly who would sit on the Redistricting Council.

The Marxist Democrats brought in out of State political operatives who packed the redistricting council and illegally influenced the redistricting to favor the Marxist Democrats and Kalifornia’s Marxist Democrats pretending to be Republicans refused the demands of their constitutes to file lawsuits against the Marxist Democrats for violating the laws.

Furthermore what most of you commenting here stubbornly insist on ignoring is that from the mid 60’s up until 2011 the percentage of Kalifornia’s population that was native born to Kalifornia was below 47%. The other 53% are/were interstate immigrants, in other words, Citizens of the United States of American by BIRTH, but born in the other 49 States who moved to Kalifornia after reaching voting age.

Many of you keep ignorantly asserting that Californians deserve what is happening to Californian because we voted for this crap. For those of you making this a$$hole stupid assertion, all I can say is that I pray to God you wake up to find the exact same thing has happened to YOU. That enough people move to your state for financial reasons, that they can vote your State into a Marxist Utopia by becoming majority in your State who can take from you everything you own by virtue of their percentage of the population exceeding your percentage of the population.

Brown is a weird harlequin, a hybrid clown of personal disorder and political delusion, a maniacal ADD-afflicted socialist Peter Pan, jumping from job to job and doing just as badly each time without any apparent personal consequences or growth or change. Truly, a bizarre individual. But our stupidity is really to blame. It is somehow perfect that, 35 years after running the state into the ground, he has been re-elected to finish it off.

That enough people move to your state for financial reasons, that they can vote your State into a Marxist Utopia by becoming majority in your State who can take from you everything you own by virtue of their percentage of the population exceeding your percentage of the population.

Thank you! I don’t think we are ignorant of the fact that most people living in CA were not born there…

There is also an understanding that CA has suffered a huge influx of illegals also…

What interests me most is when did the political climate change and who wrought that change within your fair state?

I am sure it wasn’t so much native californians, but ‘out of staters’…

I had no idea that:

Kalifornian’s voted overwhelmingly to redistrict Kalifornia to bring about an end to the Marxist Democrat control of the State, both Kalifornia State Law and Federal Law stated unequivocally that neither political party could influence either directly or indirectly who would sit on the Redistricting Council.

The Marxist Democrats brought in out of State political operatives who packed the redistricting council and illegally influenced the redistricting to favor the Marxist Democrats and Kalifornia’s Marxist Democrats pretending to be Republicans refused the demands of their constitutes to file lawsuits against the Marxist Democrats for violating the laws.

It wasn’t for a lack of trying that people wanted change, but the corrupt gov’t within your state stopped it…

I feel for you, CA is a beautiful state, but progs and dems have made it ‘ugly’…

California’s biggest problem is illegal aliens and the liberals that support/pander to them. As late as the 1970s California had the best K-12 public education system in the country. Today California students rank down with those from Mississippi and Arkansas in standardized tests. There’s one primary reason.

The only businesses that will stay in California are those run by moonbats, the ones that are addicted to the liberal Kool-Aid.

Ward Cleaver on March 20, 2013 at 12:44 PM

Sad but true.

Dad’s family has been in both Texas & Arkansas since statehood…Cousins settled in Carthage by the 1840 census, while we went from Virginia to Tennessee to Arkansas…But we caught up with our cousins as soon as we could by the 1890’s.

I feel for you, CA is a beautiful state, but progs and dems have made it ‘ugly’…

Scrumpy on March 20, 2013 at 12:52 PM

Don’t forget the illegal aliens Scrumpy. They deserve credit too. They have played a major role in driving the state into debt, closing hospitals and destroying the state’s educational system. Of course, they have the full support of the liberals.

Doubt we will see bayam on this thread-how can any Paul Krugman Disciple defend this?

Very good friend of mine here in NH (a conservative) has a moonbat Democrat wifey, and she wants them to retire to California once he becomes a pensioner in 3 years. But in the past couple of months she’s suddenly changed her mind, and this kind of stuff is one of the reasons. Why retire someplace where you won’t even be able to afford to live?

Thank you! I don’t think we are ignorant of the fact that most people living in CA were not born there…

There is also an understanding that CA has suffered a huge influx of illegals also…

What interests me most is when did the political climate change and who wrought that change within your fair state?

I am sure it wasn’t so much native californians, but ‘out of staters’…

Scrumpy on March 20, 2013 at 12:52 PM

It began in earnest in the 60’s with the Hippy invasion. We had a good Conservative Governor in Pete Wilson 1991-1999, but then Jerry “Bat$hit Crazy Marxist” Brown got in an undid all of Wilson’s fiscal reforms.

According to a study by the Federal Reserve Bank of Dallas, 70% of Texans were Anglos in 1980. The study projects that Hispanics will overtake Anglos in 2020 and that by 2040 70% of Texans will be Hispanic. Good luck with keeping Texas conservative.

Don’t lump Michigan in with New York and California. Michigan (with a RINO governor and GOP legislature) actually has a surplus.

I can cite many states with part-time legislatures that have serious financial problems – Illinois, New Jersey and Rhode Island to name but a few.

bw222 on March 20, 2013 at 12:53 PM

Glad to hear MI has a surplus.

It also has a highly paid full time legislature.

The point I was making is that a large state like Texas gets business done with a conservative part-time citizen legislature.

Explanation of stats and graphs at the NCSL link.

NCSL has grouped the 50 state legislatures into three major categories: Red, White and Blue-and for those who want to know more, NCSL has provided some shading within those categories.

Red Legislatures

Red legislatures require the most time of legislators, usually 80 percent or more of a full-time job. They have large staffs. In most Red states, legislators are paid enough to make a living without requiring outside income. These legislatures are more similar to Congress than are the other state legislatures. Most of the nation’s largest population states fall in this category. Because there are marked differences within the category, we have subdivided the Red states. Those in Red generally spend more time on the job because their sessions are longer and their districts larger than those in

Red Lite. As a result, they tend to have more staff and are compensated at a higher rate. Within subcategories, states are listed alphabetically.

White Legislatures

Legislatures in the White category are hybrids. Legislatures in these states typically say that they spend more than two-thirds of a full time job being legislators. Although their income from legislative work is greater than that in the Blue states, it’s usually not enough to allow them to make a living without having other sources of income. Legislatures in the White category have intermediate sized staff. States in the middle of the population range tend to have White legislatures.

Blue Legislatures

In the Blue states, on average lawmakers spend the equivalent of half of a full-time job doing legislative work. The compensation they receive for this work is quite low and requires them to have other sources of income in order to make a living. The blue states have relatively small staffs. They are often called traditional or citizen legislatures and they are most often found in the smallest population, more rural states. Again, NCSL has divided these states into two groups. The legislatures in Blue are the most traditional or citizen legislatures. The legislatures in Blue Lite are slightly less traditional. States are listed alphabetically within subcategories.

Unlike California, we aren’t scared sh1tless of oil and fracking. And we are a historically agriculture heavy state… hell, we’ve got nothing but farms here… so if fears of fracking causing harm to water supplies were justifiable, we’d be the first on the bandwagon to curtail fracking. instead, it’s been a massive boom that has house values rising, unemployment low, and wages skyrocketing all over the state.

Suck it, California!

gravityman on March 20, 2013 at 12:36 PM

Enjoy it while you can, gravityman because in the not to distant future Obama, Brown, Pelosi…etc will claim that Kalifornia is too big to fail and they’ll go after the states that have money and are fiscally responsible. I think its happened before and will happen again.

California’s biggest problem is illegal aliens and the liberals that support/pander to them. As late as the 1970s California had the best K-12 public education system in the country. Today California students rank down with those from Mississippi and Arkansas in standardized tests. There’s one primary reason.

bw222 on March 20, 2013 at 12:56 PM

Sorry, Californian here, and you are profoundly mistaken. The percentage of illegal aliens in California is about the same as the national percentage, it only seems larger because California has the single largest population per state in the Union. Our 3 million plus illegal aliens represent about .7 percent of our 38,041,430 legal residents. California’s biggest problem is the rest of the United States sending their homegrown Marxist/Socialists here so they don’t have to deal with their insanity in their own states.

I always wondered if the Franchise Tax Board did this to California emigrants on a routine basis – sort of an exit tax, as it were.

Realist on March 20, 2013 at 12:24 PM

From what I’ve read and heard other places, it is. I guess they figure – correctly – that you probably won’t want to travel back to California to argue about a few hundred dollars.
I’d imagine that most people just send them the money to avoid any hassles or credit problems.

Although we know what the outcome will be, the Constitution being moot wherever Democrats are in power; it will be interesting to see the contortions the US 9th Circuit Court of Appeals goes through to allow California [and by extension the Federales] to violate Article I, Section 9, Clause 3 of the Constitution at will:

No Bill of Attainder or ex post facto Law shall be passed.

One can argue that it is in fact both. Successful businessmen who are not Leftists being an attainted class in California.

As I reminded Scrumpy, California’s biggest problem is illegal aliens. California has an estimated 25% of all the illegal aliens in the country. Of course, they are supported by the libs, but they are doing more than anyone else to destroy your state.

This won’t happen. Not even the 9th Circuit will allow this to pass. Why?

Article 1, section 10 of the United States Constitution:

No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

Thus, the US constitution prohibits ex post facto laws by the states. Article 9 prohibits them by Congress.

This is dead on arrival. Very few courts would take more than one 12(b)(6) motion to strike this down. Except possibly San Francisco, of course.

Mr. Overstreet, did you vote for Brown and all the other libs over the years that got your state where it is today? If so, then stop whining. Are you in favor of that new bond to further finance the bullet train? If the answers are yes and yes, then stop complaining. You got what you voted for, more of the same. If not, then maybe it’s time to think about moving to TX. Skip right through CO, they’ve got enough problems coming down the pike with your former neighbors who stopped and stayed. If you think this is what it’s like living in Cyprus or some other EU country, you’re absolutely right.

As I reminded Scrumpy, California’s biggest problem is illegal aliens. California has an estimated 25% of all the illegal aliens in the country. Of course, they are supported by the libs, but they are doing more than anyone else to destroy your state.

According to a study by the Federal Reserve Bank of Dallas, 70% of Texans were Anglos in 1980. The study projects that Hispanics will overtake Anglos in 2020 and that by 2040 70% of Texans will be Hispanic. Good luck with keeping Texas conservative.

Hey, right you are! I missed the *second* reference to ex post facto, and it certainly *does* apply to the states.

As to the 9th Circus Court striking it down, they can claim it isn’t an ex post facto law because it is only an interpretation of a law already out there, and “fixing” an erroneous previous interpretation.